Is CISO Global (NASDAQ:CISO) A Risky Investment?
The external fund manager backed by Berkshire Hathaway's Charlie Munger, Li Lu, makes no bones about it when he says 'The biggest investment risk is not the volatility of prices, but whether you will suffer a permanent loss of capital.' So it seems the smart money knows that debt - which is usually involved in bankruptcies - is a very important factor, when you assess how risky a company is. Importantly, CISO Global Inc. (NASDAQ:CISO) does carry debt. But the more important question is: how much risk is that debt creating?
What Risk Does Debt Bring?
Debt assists a business until the business has trouble paying it off, either with new capital or with free cash flow. Part and parcel of capitalism is the process of 'creative destruction' where failed businesses are mercilessly liquidated by their bankers. However, a more usual (but still expensive) situation is where a company must dilute shareholders at a cheap share price simply to get debt under control. Of course, plenty of companies use debt to fund growth, without any negative consequences. When we think about a company's use of debt, we first look at cash and debt together.
What Is CISO Global's Net Debt?
The image below, which you can click on for greater detail, shows that CISO Global had debt of US$2.05m at the end of September 2025, a reduction from US$11.9m over a year. However, it also had US$1.11m in cash, and so its net debt is US$942.2k.
How Strong Is CISO Global's Balance Sheet?
Zooming in on the latest balance sheet data, we can see that CISO Global had liabilities of US$8.37m due within 12 months and liabilities of US$373.9k due beyond that. Offsetting these obligations, it had cash of US$1.11m as well as receivables valued at US$1.48m due within 12 months. So its liabilities total US$6.15m more than the combination of its cash and short-term receivables.
This deficit isn't so bad because CISO Global is worth US$20.9m, and thus could probably raise enough capital to shore up its balance sheet, if the need arose. But it's clear that we should definitely closely examine whether it can manage its debt without dilution. When analysing debt levels, the balance sheet is the obvious place to start. But you can't view debt in total isolation; since CISO Global will need earnings to service that debt. So when considering debt, it's definitely worth looking at the earnings trend. Click here for an interactive snapshot.
See our latest analysis for CISO Global
Over 12 months, CISO Global made a loss at the EBIT level, and saw its revenue drop to US$28m, which is a fall of 12%. That's not what we would hope to see.
Caveat Emptor
While CISO Global's falling revenue is about as heartwarming as a wet blanket, arguably its earnings before interest and tax (EBIT) loss is even less appealing. Indeed, it lost a very considerable US$8.6m at the EBIT level. Considering that alongside the liabilities mentioned above does not give us much confidence that company should be using so much debt. So we think its balance sheet is a little strained, though not beyond repair. However, it doesn't help that it burned through US$6.4m of cash over the last year. So in short it's a really risky stock. When analysing debt levels, the balance sheet is the obvious place to start. However, not all investment risk resides within the balance sheet - far from it. Be aware that CISO Global is showing 5 warning signs in our investment analysis , and 3 of those don't sit too well with us...
At the end of the day, it's often better to focus on companies that are free from net debt. You can access our special list of such companies (all with a track record of profit growth). It's free.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.